Forex Trading Training GBPJPY 1

My Forex mentor is going to be cross when he sees this post! Ok so it had to happen but it is still annoying. I opened a buy trade on the GBPJPY currency pair using the same Forex strategies discussed in the other demo trades posts but I was not 100% certain of it and fell victim to a classic problem – lack of patience. I saw the embryonic signal appear and because the price was moving rapidly upwards I jumped in without waiting for a couple of very important things. The results are plain to see in the chart below:

Forex Mentor

I failed to 1) wait until the current candle had closed above resistance and 2) I was seduced by the rapidly moving price action. These are fundamental things that Loz is at great pains to point out on pretty much every webinar. This lack of patience cost me $65 demo dollars which is 3 days of successful 20 pip trades wiped out

The GBPJPY is also a very fast moving pair which I also totally neglected and while it can move in one direction very quickly, it can also reverse equally quickly. So no sooner had I entered the trade when I realise my mistake and watched in horror as the price respected the resistance level and dropped like a stone! Instead of immediately exiting the trade I also made the second mistake of trying to ride out a bad trade thinking my money management was fine and it would eventually come back. Well it did not come back and I eventually decided to close the trade at -65 pips or so.

After having a bit of a fume I decided to have a bit of a post mortem and came to the conclusions above. The main reason why I should not have entered the trade was the proximity of the price to resistance but my judgment was swept away by the seductively rising price.

A good lesson to learn (again) on a demo account but it underscores how patient you must be to make a consistent profit in Forex trading. Hopefully better news to post tomorrow after a more patient analysis of the charts.

You can read more about the Forex Signal Mentor strategies I am using by clicking this link.